G Secs become investor friendly: RBI

Mumbai, Jun 25 (UNI) Government securities (G-Secs), including Relief and Savings Bonds issued by the Union government, have now become more investor friendly, with the addition of new features.

G-Secs now have an automatic redemption and nomination facility, besides the Bond holders can create pledge, hypothecation or lien, in respect of such security, the RBI said in a release here. Moreover, the procedure to recognise the title to a Government Security of deceased holders has further been simplified and it could be done now on the basis of any valid document admissible in a court of law.

These investor friendly features have been added to Government Securities in the Government Securities Act, 2006 (Act) and the Government Securities Regulations, 2007 (Regulations), which came into effect from December 1, 2007. Investors of Relief/Savings Bonds and holders of other Government Securities are likely to benefit from these changes.

The Apex bank said holders of Government Securities, including Relief/Savings Bonds, could simply give their bank details in an Electronic Clearing Services (ECS) mandate form to the Public Debt Offices (PDOs), RBI, if Government Securities have been issued by PDOs or to the agency bank for the Relief/Savings Bonds issued by them. This would facilitate the receipt of the redemption amount of Government Securities and interest accrued thereon, from time to time in their bank account. Once ECS mandate form is given to the RBI/agency banks, the holders would not have to separately submit physical discharge towards maturing Government Securities to receive the redemption amount. RBI/agency banks would automatically credit the holder's account with the maturity proceeds. The facility of automatic redemption is applicable to all Government Securities, held in the form of Stock Certificate (SC), Bond Ledger Account (BLA) and Subsidiary General Ledger Account (SGL).